This entry was posted on Wednesday, July 18th, 2007 at 10:03 pm and is filed under Education, fun, shorts are longs?. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
I have for a long time debated with readers, colleagues, and peers over the use of shorting. I at one time I had an open invitation to anyone to give me the parameters or rules of a shorting system for individual stocks that held in the swing timeframe (1-10 days) - that resulted to anything close to solid results. Anyway I have yet to see one.
This led me to an idea. I would like you the readers to send me links from other blogs and mainstream websites that list potential shorting candidates. I will then take these stocks that are setting up as potential shorts and play them to the long side. I will run a little 5 position portfolio just like I did on the old blog. I am working on getting a stocktickr.com portfolio setup so you can follow along.
I think ultimately the concepts that I may prove are a consistent exit is very powerful and the negative pessimism adds potential fuel to the upside. On all of these trades I will use the exit that I have mentioned here frequently - the close above the high of the previous 2 days. For the purposes of this little fun experiment I will focus on stocks with higher market caps. Lets just say Russell 1000 type material for now. I do not want to make this work for me so please this is just for fun with no disrespect to the originator of the shorting idea. Ultimately the trade may work in their favor.
I will need your help. Please Please help me find candidates that are out there. If I don’t have short ideas coming in from you that you see out there I will never be able to keep up with the number of holdings we need. The worse the chart pattern the better. The one rule I will likely add is that I will want a down day before I enter at the market open the following day.
So get out there and get me some really really bad ideas - I mean it c’mon the worst!. Maybe we can have a trade for tomorrow. Just leave a comment on one of the posts or email me directly at dayvejohnson@gmail.com
Have a Great Night!
Dave Johnson
July 18th, 2007 at 10:37 pm
Hi Dave,
At the moment all indices are around their all time high, your idea of playing long on some potential short sell candidates only demonstrates some extreme cases of market behavior. What do you expect to learn from this experiment?
July 18th, 2007 at 10:45 pm
Dave,
Sorry! forget to leave the link in the last feedback, here it comes
http://seekingalpha.com/by/type/short-ideas
Have fun!
July 18th, 2007 at 10:46 pm
George I want to show how important the exit is to swing trading and that potential short candidates can make good watchlists for longs.
Also I use wealth-lab for testing.
George I could kiss ya! Thanks for bringing the first candidate. By the open tomorrow I will have a official trade.
July 20th, 2007 at 8:15 am
[...] Anyway I had some good personal submissions for todays short candidate. I saw a couple that had market caps the were a bit small. The one I have settled on is HSY. Man that chart is worse than a chocolate bar on a hot sunny day. Awesome. It will be added to the long portfolio. Remember the exit…… [...]
August 20th, 2007 at 1:01 am
Perhaps you can use Reuters Contrarian stock screen for ideas
http://www.investor.reuters.com/WeeklyResults.aspx?target=%2F%2Fwresults&oldindex=0&SGroup=1&SScreen=3
OR
Jim Cramer’s SELL recommendations (many already in downtrends as marked with an asterisk)
http://www.cramers-mad-money.com/; i.e. August 16
Sell:
Acadia Pharmaceuticals Inc (ACAD)
*Capital One Financial Corp (COF)
Cepheid (CPHD)
*CapitalSource, Inc (CSE)
*Friedman, Billings, Ramsey Group, Inc (FBR)
*H&R Block Inc (HRB)
*Jones Soda Co (JSDA)
Lamson & Sessions Co (LMS)
*QLogic Corp (QLGC)
*Star Maritime Acquisition Corp (SEA)
*Six Flags Inc (SIX)
VMware Inc (VMW)
*WMS Industries (WMS)